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Three countries, three deals

When it comes to investing in Africa, it is clearly seen that the Western investors are missing out on large deals, and still having trouble to realize that African economies moved far beyond of being a cheap source of raw materials

The gap is there to fill, and there are plenty of other investors with vision and confidence in African markets’ potential.

Three major developments in Uganda, Rwanda and Tanzania this week:

Only a few months after announcing of $230 Million investment in Rwandan tourism sector, Dubai World is expressing interest in Rwandan tea factories

Dubai World is in ‘advanced discussions’ with the government of Rwanda for a portion of the African nation’s tea sector, reported Rwanda News Agency. Executive Secretary of the Privatisation Secretariat, Twahirwa Manasseh, said the holdings firm wants to buy out the Gisovu Tea Estate and factory, Gisakura Tea Estate and factory, and Kitabi estate and factory - all in western Rwanda.

Dubai World is a group owned by the government of UAE, active in four major areas:
Transport & Logistics, Drydocks & Maritime, Urban Development and Investment & Financial Services.

According to the group, it committed $4 Billion to projects in Africa.

Dubai: Dubai World said it has committed $4 billion for various projects in Africa.

These developments include tourist resorts and ports in countries such as Djibouti, Senegal, Rwanda and South Africa.

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Manufacturing is a sector that needs to be established and heavily invested into, in order to bridge gaps with developed economies. This is where Chinese investors come into the picture.

Chinese investors are establishing themselves as a major player on the African markets, and apart from securing its oil-related interests in Sudan - a move that draws a lot of criticism, considering the political situation Sudan is in - they broaden their scope of activities in the region into non-energy sectors.

Latest example: motor vehicle spare parts factory in Uganda

THE Union International Automobile Parts, a Chinese-based firm, is to invest over sh4.8b(*) in a motor vehicle spare parts factory. Yu Hua, the managing director, explained last week that plans had been finalised to set up the plant.

“We have discovered there are investment opportunities in areas of spare parts and all we are looking for is a convenient place for the factory,” Hua said.

Hua was speaking at the opening of the company’s first showroom in Kampala. He asked the Uganda Investment Authority to find them land for the multi-billion project.

The company manufacturers filters, air cleaners, water pumps, shock absorbers, spark plugs, all types of gaskets and other automobile accessories.

Hua said when the company is established, every thing would be Ugandan.

“It is going to be a Ugandan company, employing Ugandans and exactly everything would be made here,” Hua said.

He said they would expand regionally.

establishing other sister companies in Kenya, Rwanda, Tanzania and Burundi to exploit the investment opportunities the East African region.

“The East African people are so good. They are hospitable and there is ready market for our manufactured goods,” Hua said.

Union International Automobile Parts has branches in Chicago, Dubai and Japan.

*Sh4.87 Billion is $3.05 Million

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African telecom market is probably one of the most rapidly developing ones in the world.

A major $500 Million investment is planned in the mobile market in Tanzania

New mobile phone operator Hits Tanzania Ltd plans to invest $500 million in its countrywide coverage within 13 months.

The firm’s chief executive officer Gerhard May, said Hits is targeting a network capacity for initial two million customers in the same period.

The firm has already signed a $180 million deal with its strategic partner Huawei Technologies of China to set up its network in the country.

According to Mr May, the two partners have started work on the network infrastructure as well as on construction works for the mobile switching centre and the firm’s headquarters in Dar es Salaam.

He added that the firm chose to invest in Tanzania because of the potential market, given the low penetration of mobile phones.

Hits becomes the sixth mobile phone operator to enter Tanzania after Celtel Tanzania, Vodacom Tanzania, Tigo Tanzania, Zantel Tanzania and the Tanzania Telecommunications Company.
Hits Tanzania is financially backed by Hits Africa — an arm of Hits Telecoms Holding based in Kuwait — and local investor Jitco.

Hits Africa is rolling out a series of telecommunications operations in Africa and has obtained GSM licences in the Democratic Republic of Congo, and Equatorial Guinea and is a shareholder in Atlantic Telecom of Liberia.

Hits Africa will be the second national telecoms operator in Equatorial Guinea, after being picked by the government to establish a converged fixed, mobile and data network throughout the country by 2009. It will roll out 2.5G and 3G mobile networks in the country by the end of 2008.
Hits Telecoms has investments and interests in the Middle East, Africa and Latin America. In Saudi Arabia, the firm is a key shareholder in ITC, the national broadband wireless data network.

Through its subsidiary Qanawat, the group is a major player in the telecoms distribution and service market.

The group plans to expand operations in both Africa and Latin America as well as obtain majority stake in a European operator. Hits America, part of the Hits Telecoms Group, operates in Brazil.

By selling stakes to private equity investors, Hits Africa plans to raise $300 million in capital by end of June. It aims to have between four million and six million subscribers by 2012 in eight African countries.